Microsoft and Apple have always been fierce rivals, being mammoths in the tech industry. Bill Gates had become the world’s richest man by 1995, with a net worth of $13 billion, and his firm company was competing with Jobs’ for the dominant spot in the personal computer space. And then, in August 1997, something spectacular happened, with Apple on the brink of bankruptcy, Gates invested $150 million in a bid to save the company.
Back then, Gates had a reputation of being a shrewd businessman and extremely unapologetic. There are multiple reasons as to why Gates might have done it, even though it meant the elimination of a direct competitor. Apparently, Apple had sued Microsoft over patent infringement over their operating system.
At the same time, Apple was running out of money because of IBM’s hate advertising against it and millions being spent in court. The company was short of cash to even meet its salary obligations over the next few months. Hence, Jobs comes up with a plan for an out of court settlement with Gates, who also knew that his company could have been in trouble over the lawsuit.
Gates also saw it as a tremendous business opportunity. The Mac computers were super successful, and the customers bought millions of copies of Microsoft Windows, along with Microsoft Office. Also, Apple was to make Internet Explorer as its primary browser for the next five years.
Microsoft was also being investigated by the American Department of Justice (DOJ) over assembling of a monopoly and stifling competition. By saving competition, the DOJ dropped charges on Microsoft and just levied a small fine.
Gates ended up with 18.2 million non-voting Apple shares, which he later got converted to normal shares and sold them off in 2003. Had he kept them, they would have been worth over $50 billion today.
Many thought this story was not true until the two met for an interview together at the D5 tech conference a few years later. “That has worked out really well”, said Gates. Well yes, it has worked out really well for sure.
Image credits: Silicon Angle
Past Present Continuous 